Spain's great all-round summer

Spain is having a great summer and the place is on the up in the property, vacation, financial and weather sectors, all of which impact on property purchase.

After three years of construction lay-offs and cut-backs in housing production – down from 600,000 a year to 400,000 – annual output was up 18.6%, the highest in the Eurozone. This should mean more choice in two years and give time for the current crop of Spanish bank repossessions to be sold off at discounts of up to 53% and average price cut of 34%, compared with peak year 2007.

After a slow start to the holiday season, 22 million passengers arrived in Spain last month, a 3.7% increase over the same period last year. They timed it right as it was the third hottest August in Spain so far this century. The hottest days were in Valencia, Alicante and Murcia, where temperatures reached 44 degrees. (That’s 111F).

Murcia, which offers the best winter climate in Europe, is to be the location for a new theme park announced by Hollywood studio Paramount Pictures. The project is expected to create 20,000 jobs and attract 3 million visitors per year to the Murcia region and boost the fortunes of Polaris World and home buyers at their seven golf resorts encircling the new home of Shrek, Lara Croft, Ethan Hunt and other stars of the silver screen.

Having a house, close to Disney theme parks, has proved to be a good choice as it can produce year-round rental cash. So well done Polaris World buyers and by the way there are bargain penthouses still available within 10 minutes drive of the Paramount front gates for other canny investors...

Such a big name theme park in the region will attract further projects and is expected to make Murcia one of the European hot spots for second homes in the years ahead. Murcia is just a two hour flight from the UK and offers the best winter climate in Europe.

A new international airport is set to open in 2011 at Corvera within 20 minutes of all the Polaris World resorts and close to the proposed site for the Paramount theme park.

During the second quarter of this year, sales of residential property in Spain rose by 24% compared with 2009. Almost 150,000 properties were sold in this period, the third consecutive quarter to show an increase. In Málaga province, the increase was 26.2%. Now is the time to buy before the best of the Spanish bank repossessions and key ready bargains from less troubled developers run out.

Capital Gains less taxing in Spain

So the dreaded Capital Gains Tax remains at 18% for most Brits, but the UK Budget added an extra 10% for high earners who want to sell second homes in the UK or Spain.

The tax clicks in only after the owner’s basic UK profit allowance of £10,000 has been applied along with the cost of any improvements and running costs (if renting it out).

This change is likely to encourage more Brits to buy a second home in Spain, where the capital gains tax is the same as the UK basic of 18%, but this can be offset by taking away taxes paid and other costs on acquisition and on selling and then working a multiplier based on the number of years in ownership. In Spain there is no extra percentage penalty for being a wealthier owner.

However, for official ex-Pat residents there is no CGT (Impuesto sobre Incremento de Patrimonio de la Venta de un Bien Inmeuble) payable in Spain if, within two years, you reinvest the proceeds of the permanent house sale in a replacement property and you get to deduct the buying costs from the profits when you come to sell the replacement house. Likewise for all residents over 65s.

More good news for resident house sellers in Spain is that any CGT paid can be offset against any personal income tax due for the year of sale.

Because the countries have a Double Taxation Agreement, whatever CGT a property seller who remains a UK resident has paid in Spain can be offset against what might otherwise be due in the UK, again minus the personal allowance.

Conclusion: With the abolition last year of Spain’s Wealth Tax, it is more likely property owners –resident and non resident - will pay far less CGT in Spain, but better to use a local accountant or gestor to do the sum and agree the amount with the Hacienda. They will ensure you understand your own personal obligations and liabilities and help mitigate the CGT handed over.

For serious buyers, there are many Spanish bank repossessions at bargain prices, Sterling has regained the 20% lost against the Euro since 2008, low cost mortgages of up to 90% and helpful sources like PropertyInSpain.Net who specialise in bank-owned bargains and no-hassle purchase of fully legal property in Spain.

Euro boosters for property in Spain

Britain's new coalition government has got off to a quick and appreciated start with national budget savings and waste-avoidance supposed to save £6 billion this year and this seems also to have boosted Sterling against the much troubled Euro.

The pound is approaching its highest level against the Euro since it slumped to near parity in November 2008 and that is enough for many prospective Spanish property buyers to make a positive move to grab one of the many villa and apartment bargains for themselves in 2010.

Others are waiting for the meat of the upcoming UK budget that pundits are confident will begin to sort out the McBroon fiscal failures and command the confidence of investors and credit rating agencies.

Either way, it seems it will cost Brits less to buy a bargain home in Spain, whether for family holidays, over-50s investment or fulltime retirement living. With all-time low interest on Spanish mortgages – typically around 2% - many would-be buyers are looking keenly at Spanish bank repossessions and other bargains that come with guaranteed 90% mortgages.

It makes sense to many people to go for the maximum Spanish mortgage and put their cash on deposit in the UK on interest rates that are twice what their mortgage is costing them. There can be further savings in acquisition costs in paying off part of the mortgage if sterling continues its upward rate in the years to come?

Euroland is displaying all the worst traits of a currency union that applies a one-size-fits-all interest rate to a group of 16 different countries. Britain, meanwhile, seems to have elected a coalition government with the ability and commitment to set right a national debt that will have doubled in the next year or so.

There’s a greater air of confidence in the Cameron Government as it makes a succession of “sensible decisions” to remedy 10 years of Labour fiscal foul-ups. With this new-found market confidence sterling is sure to win out against the Euro?

Low mortgages, prices 16%-50% below valuation, wide property choice in beach and golf resorts from specialists PropertyInSpain.Net and ownership costs only one third of the UK’s… Now is the time to buy a bargain property in Spain.

Bonanza for Spanish timeshare buyers

There could be a double your money bonanza for people who have purchased a timeshare property in Spain, as a new court ruling looks set to spark-off an avalanche of timeshare compensation claims against developers.

The new Spanish court ruling can now be used by up to 400,000 European timeshare owners to seek compensation from illegal contracts signed after 1996 in Spain and industry experts believe that timeshare compensation claims could reach two billion Euros.

As property buyers already realise, under Spanish law, even if a property is sold on all debts and encumberments are passed to the new owners. If a timeshare property has changed its ownership, the new owners will still be liable for new compensation claims.

Magistrate D. Juan Carlos Socorro Marrero has ruled that a timeshare developer in Gran Canaria must pay back double the amount of the timeshare deposit taken within the cooling off period.

In a case brought against Anfi Sales SL, part of the Anfi Del Mar Group in Gran Canaria, the Magistrate commented:” The case of paying an advance instalment is in opposition to what is dictated in the law 42/1998, article 11, the second section of this mentioned rule permits the acquirer “at any time” to get back double the stated amount.”

Anfi Del Mar reportedly one of the most largest and luxurious timeshare developments in Europe, is now set for up to 10,000 new claims for timeshare miss-selling under the 1994 European timeshare directive. Anfi Del Mar was once owned by TUI, the largest travel agent in the world. The company, who own and operate several of the best known UK high street tour operators including Thomson, were also responsible for taking illegal timeshare deposits at Anfi from 2001 to 2004.

At present there are over 200 live claims for timeshare mis-selling against Anfi Del Mar in the Spanish court system and with fresh claims coming in at a rate of 10 a week before this ruling, it is not known what affect this will have on the stability of Anfi Del Mar.

Under Spanish law, even if a property is sold on, all debts and encumberments are passed to the new owners or if a timeshare property has changed its ownership, the new owners will still be liable for new compensation claims.

This timeshare ruling does not apply to straightforward property sales where Brits and other foreign buyers have acquired the freehold of the apartment or villa. In the case of Spanish bank repossessions, sold by specialists like PropertyInSpain.Net, all unpaid mortgage amounts and other debt is wiped clean and a new mortgage deal offered.

In other new and resale deals, using an independent Spanish solicitor ensures all other debts lodged against the property are paid off before registering the new deeds.

Spain digs into their debt mountain

If you thought the new British coalition government was off to a flying start to cut the growing debt mountain and save the nation, better look at what the Spanish Government has been up to in the same period.

Two countries trading on over-priced properties and suffering from the fact the affordability level has been reached; two countries suffering from their highest unemployment levels; two countries pole-axed by Left-wing Socialist public sector overspending; two countries sharing the biggest tourism market in Europe as Brits continue their three decades relationship - and the Spanish get the lolly and the jobs.

Now the UK has seen the light and a new Government is promising to turn things around and the Spanish Government, with a general election due within the year, has seen what has happened to fellow impoverished travellers Greece and to the UK's failed Labour Government and decided enough is enough.

So there’s to be a new wealth tax on people with “high-economic capacity” as a sop to the less well off, who like their UK counterparts, are likely to be hammered under new austerity measures designed to reduce the Spanish deficit from 11.2% to 3% by 2013. Likely revenue is around EUR 2 billion, based on similar wealth tax abandoned in 2008.

The Spanish Government has got approval for a EUR 15 billion austerity package that includes wage cuts of 5% for civil servants just when the economy, like that of the UK, is just crawling out of the red. With the third largest deficit in Euroland Spain is hoping the move with have a calming effect…

Spanish banks, feeling the pain of their excessive lending in the property sector for the last decade made their first big move as four Spanish regional savings banks, led by Caja de Ahorros de Mediterraneo, reached a preliminary agreement to merge some of their operations.

The agreement, which also includes Cajastur, Caja de Extremadura and Caja Cantabria, would aim to create a joint banking group that seeks to “strengthen solvency and assets of the participating banks”. The move followed the Bank of Spain taking control of another savings bank Cajasur after trade unions blocked a planned merger with Unicaja.

Finally, there is to be a massive clampdown on motorist lawbreakers with increased on the spot fines and non payment collection extended to four years because 40% of traffic fines have never been paid in Spain. The Interior Minister said: This doesn’t mean that we think that we are going to make more money out of fines”. Where have we heard that before?

The property market is strengthening as increasing numbers of bargain hunters fly to buy in Spain and find Spanish bank repossessions at discounts of up to 50% and such outstanding loan to values that 90% mortgages are on offer.

Election chaos speeds Brits to sunbelt

It wasn’t exactly a comprehensive survey, but the one on emigration commissioned by Currency UK was timely, as Britain slumped to an all-time low in the corruption league table with the cobbled plans for a Government of the Election Losers to run the country…

That latest attack on UK democracy came just after the survey, so the next one might show even greater interest in Over-50s quitting the UK for that sunbelt lifestyle.

The survey showed that:

1. Many Brits are concerned by the prospect of a hung Parliament and that the next four years will be dominated by huge tax rises, cuts in public service and inflation.
2. People are concerned about the UK's economic strength and this is leading to Brits looking to get out.
3. Three in four Britons have considered moving abroad this year.
4. Three in ten said the poor state of the economy was their reason for wanting to emigrate, a survey found.
5. A quarter of those polled blamed the lack of job prospects while an eighth said a change in the pace of life was the main attraction.

Whatever the outcome of the Lib-Lab and Lib-Con machinations, the country's politicians have clearly lost their moral compass and that will cause thousands more citizens to head South to Spain or Australia, the most popular emigration destinations.

That a pair of disgraced unelected spin doctors are being blamed for the post-election stitch-up fiasco will speed up the departure dates for many.

Not that politics is much better in either Spain or Australia, as both are run by spend-spend left-wing Labour governments… but the sun shines for 300 days of the year, the cost of living is lower and newly-arrived Brits will be so busy retiring, they won’t have time to get involved in the grubby stuff.

McBroon duffed-up by a pensioner

McBroon, the raider of British pensions, came face with a real pensioner when told he had to mix more with real voters instead of the marshalled lines of McBroon-nosers hitherto in the election campaign...

The smiles and smarms of his little chat with Gillian Duffy - a grandmother who had worked for Rochdale council for 30 years - vanished when he got into the safety of his bomb-proof Jaguar. McBroon's rant in which he denigrated Mrs Duffy as "bigoted woman" was picked up by his still attached Sky News lapel microphone and broadcast around the world in minutes.

The message was clear, McBroon epitomises bigotry and hypocrisy, easily capable of switching from Mr Nice to Mr Nasty when he thinks he is not in control. He placed no value on the good works Gillian Duffy had done with handicapped kids and other in need sections of the public.

Her views seemed to him to be at odds with his own, despite she claimed she was a life-long Labour Party supporter but now with concerns about tax, law and order, education and immigration.

Other pensioner voters will have further concerns about McBroon and his rants and rages. He's lost Gillian Duffy's vote and now millions more could vanish because pensioners represent around 40% of the electorate.

And many pensioners will be browsing the property in Spain Spanish bank repossession bargain pages to get as far away from McBroon and his cohorts if they come anywhere near influencing any of their lives after the election...